-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S3mz312IS0m/xBv9wqlxvmSPLR+velJk/yb1TZEimetAjU5ROJ9hn/4vZfsJh103 pB2x9r7TFp00SrwPoh6MCg== 0001157523-03-001095.txt : 20030417 0001157523-03-001095.hdr.sgml : 20030417 20030416190946 ACCESSION NUMBER: 0001157523-03-001095 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030416 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030417 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIONBANCAL CORP CENTRAL INDEX KEY: 0001011659 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 941234979 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15081 FILM NUMBER: 03653289 BUSINESS ADDRESS: STREET 1: 400 CALIFORNIA STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94104-1476 BUSINESS PHONE: 4157652969 MAIL ADDRESS: STREET 1: 400 CALIFORNIA STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94104-1476 8-K 1 a4377526.txt UNIONBANCAL CORPORATION 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K |X| CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: April 16, 2003 Commission file number 001-15081 UnionBanCal Corporation State of Incorporation: California I.R.S. Employer Identification No. 94-1234979 400 California Street San Francisco, CA 94104-1302 Tel. (415) 765-2969 Item 9. Regulation FD Disclosure On April 16, 2003, UnionBanCal Corporation issued a press release concerning financial results for the first quarter 2003, a copy of which is included as Exhibit 99.1 and incorporated herein by reference. The information included in this section is also intended to be included under "Item 12. Results of Operations and Financial Condition" and is included under this Item 9 in accordance with SEC Release No. 33-8216. The information included herein and in Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933. Exhibit No. Description - -------------------------------------------------------------------------------- 99.1 Text of press release dated April 16, 2003. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: April 16, 2003 UNIONBANCAL CORPORATION By: /s/ DAVID I. MATSON ------------------------------------ David I. Matson Chief Financial Officer (Duly Authorized Officer) EX-99 3 a4377526ex99.txt EXHIBIT 99.1 Exhibit 99.1 UnionBanCal Corporation Reports 22% Increase in First Quarter EPS; Full Year Guidance Affirmed SAN FRANCISCO--(BUSINESS WIRE)--April 16, 2003--UnionBanCal Corporation (NYSE: UB) today reported first quarter 2003 net income of $135.5 million, or $0.89 per diluted common share, a 21.9 percent increase over the $0.73 per diluted common share earned in first quarter 2002. Total revenue increased $36.5 million, or 6.7 percent, while the provision for credit losses declined $25 million, or 45.5 percent. Compared with fourth quarter 2002, net income in first quarter 2003 declined $9.4 million, or $0.06 per diluted common share. The sequential quarter decline in earnings per share was anticipated, as it primarily reflects normal seasonal differences between the fourth and first quarters, including two fewer days for the accrual of net interest income and significantly higher employer payroll taxes. "I am satisfied with our performance in the first quarter, given somewhat challenging business conditions," stated Norimichi Kanari, President and Chief Executive Officer. "Compared with first quarter 2002, total revenue was up a solid 6.7 percent and the provision for credit losses declined significantly. In addition, average noninterest bearing deposits grew $2.8 billion, or 24.5 percent, and our annualized all-in cost of funds declined to just 0.67 percent. "I am also pleased to report further progress in the strategic positioning of the company," said Kanari. "On April 1, we completed the acquisition of our third insurance brokerage in 16 months. We welcome Tanner Insurance Brokers, one of the top 100 insurance brokers in the U.S., to the UBOC Insurance group, where it joins Armstrong/Robitaille Business and Insurance Services and John Burnham Insurance Services. On April 8, we announced the pending acquisition of Monterey Bay Bancorp, a $610 million-asset institution headquartered in Watsonville, California. Monterey Bay Bank will add eight full-service branches, all in the desirable Monterey Bay area, to Union Bank of California's existing 267 branch network. We expect this transaction to close in the third quarter," concluded Kanari. Total Revenue For first quarter 2003, total revenue (taxable-equivalent net interest income plus noninterest income) was $577.2 million, an increase of $36.5 million, or 6.7 percent, compared with first quarter 2002. Net interest income increased 2.7 percent, and noninterest income increased 16.3 percent. Compared with fourth quarter 2002, total revenue was $8.3 million, or 1.4 percent, lower with net interest income decreasing 3.3 percent and noninterest income increasing 2.7 percent. Net Interest Income (Taxable-equivalent) Net interest income was $391.4 million in first quarter 2003, a $10.4 million, or 2.7 percent, increase from the same quarter a year ago. Average earning assets grew $2.9 billion, or 8.9 percent, primarily due to a $1.6 billion, or 6.4 percent, increase in average loans, and a $1.5 billion, or 26.2 percent, increase in average securities. Average commercial loans decreased $902 million, or 8.0 percent, primarily due to a reduction in non-core relationship syndicated loans, while average residential mortgages increased $1.5 billion, or 29.2 percent, and average commercial mortgages increased $522 million, or 14.4 percent. The net interest margin in first quarter 2003 was 4.53 percent, a decrease of 27 basis points compared to first quarter 2002, reflecting the lower interest rate environment in first quarter 2003, and a change in the earning asset mix. The average yield on earning assets of $34.8 billion declined 66 basis points, while the average rate on interest bearing liabilities of $19.3 billion fell 57 basis points. The decline in net interest margin was partially mitigated by outstanding growth in average noninterest bearing deposits, which increased $2.8 billion, or 24.5 percent. Average noninterest bearing deposits represented 45.4 percent of total deposits, up from 41.1 percent in the same quarter a year ago. On a sequential quarter basis, net interest income decreased $13.2 million, or 3.3 percent, partially due to two fewer days in the first quarter than the fourth quarter. Average earning assets grew $327 million, or 1.0 percent, with average loans up $190 million, or 0.7 percent, and average securities up $624 million, or 9.7 percent. Average residential mortgages increased $434 million, or 7.1 percent, while average commercial loans decreased $443 million, or 4.1 percent. Average noninterest bearing deposits were flat, with increases in business demand deposits and government and public agency demand deposits partially offsetting normal seasonal declines in the title and escrow businesses. The net interest margin decreased 14 basis points to 4.53 percent. Noninterest Income In first quarter 2003, noninterest income was $185.8 million, up $26.0 million, or 16.3 percent, from the same quarter a year ago. Service charges on deposit accounts increased $6.1 million, or 9.3 percent, primarily due to higher account analysis and overdraft fees. Trust and investment management fees were down $4.1 million, or 11.0 percent, primarily due to the decline in equity market values, a continuing mix shift by clients toward lower profit money market portfolios and lower wealth management fees. Insurance commissions increased $5.9 million, to $13.0 million, primarily reflecting the fourth quarter 2002 acquisition of John Burnham Insurance Services. First quarter 2003 other noninterest income included a $3.3 million property insurance recovery for losses sustained on 9/11/01 in the World Trade Center attacks. First quarter 2002 other noninterest income included private equity portfolio net losses of $4.4 million. Auto lease residual writedowns were $0.3 million in first quarter 2003, compared with $6.0 million in first quarter 2002. Noninterest income increased $5.0 million, or 2.7 percent, on a sequential quarter basis. Service charges on deposits increased $1.1 million, or 1.6 percent. Trust and investment management fees decreased $1.6 million, or 4.7 percent. Insurance commissions increased $5.3 million, or 69.3 percent, reflecting the fourth quarter 2002 acquisition of John Burnham and strong growth in insurance commissions at Armstrong/Robitaille. Auto lease residual writedowns were $0.3 million in first quarter 2003, compared with none in fourth quarter 2002. Effective January 1, 2003, merchant transaction processing expenses were reclassified to card processing fees to reflect the Company's agent relationship for these transactions. Prior period noninterest income and noninterest expense have been conformed for consistency. The reclassification reduced both card processing fees and merchant transaction processing expense by $11.7 million for first quarter 2002, and by $12.5 million for fourth quarter 2002. Noninterest Expense Noninterest expense for first quarter 2003 was $342.6 million, an increase of $30.9 million, or 9.9 percent, over first quarter 2002. Salaries and other compensation expense increased $10.6 million, or 7.5 percent, primarily due to annual merit increases and higher employee count associated with recent acquisitions. Employee benefits expense increased $8.6 million, or 23.6 percent, primarily due to higher employee count associated with recent acquisitions, and increases in health benefits expense, employer payroll taxes, and 401(k) plan expense. Net occupancy expense increased $4.3 million, or 18.2 percent, primarily due to recent acquisitions, de novo branching efforts, other facility restructuring initiatives and higher property insurance expense. Intangible asset amortization expense was $2.5 million, an increase of $1.6 million compared with prior year, due to recent acquisitions. On a sequential quarter basis, noninterest expense decreased $8.3 million, or 2.4 percent. Salaries and employee benefits expense increased $14.2 million, or 7.7 percent, due primarily to the usual first quarter increase in employer payroll taxes and higher employee count associated with recent acquisitions. Net occupancy expense decreased $3.2 million, or 10.4 percent, primarily due to a $2.7 million charge recorded in fourth quarter 2002 related to a strategic initiative in the Pacific Northwest. Professional services expense decreased $2.0 million, or 14.6 percent, due primarily to a decrease in consulting projects. Noninterest expense for fourth quarter 2002 included the effect of a $15.3 million amortization adjustment, as the Company standardized its accounting for low income housing investments. The efficiency ratio for first quarter 2003 was 59.35 percent, compared with 57.61 percent in first quarter 2002, and 59.93 percent in fourth quarter 2002. The increase in the efficiency ratio versus prior year was due primarily to the lower interest rate environment in first quarter 2003 and its adverse effect on net interest income. The operating efficiency ratio for fourth quarter 2002, which excludes the aforementioned $15.3 million amortization adjustment related to low income housing investments, was 57.31 percent. Credit Quality Nonperforming assets at March 31, 2003, were $387 million, or 0.96 percent of total assets. This compares with $337 million, or 0.84 percent of total assets at December 31, 2002, and $453 million, or 1.25 percent of total assets, at March 31, 2002. Philip Flynn, Chief Credit Officer, commented, "The first quarter increase in nonperforming assets of $50 million was primarily attributable to the addition of $67 million in aircraft lease obligations. As usual, we have been conservative in taking this action. The leases are current and the lessees are not in bankruptcy. However, given the turmoil in the aircraft industry, it is likely that at some point this year we may need to recognize some impairment on these leases. Since the company established adequate loss reserves for its aircraft lease exposure in 2002, the increase in nonperforming assets has not resulted in higher than expected provision levels in first quarter 2003. It is important to note that absent the aircraft leases, nonperforming assets would have declined from the previous quarter's level." For first quarter 2003, the provision for credit losses was $30 million, compared with $30 million in fourth quarter 2002, and $55 million in first quarter 2002. Net loans charged off in first quarter 2003 were $53 million, compared with $47 million in fourth quarter 2002, and $61 million in first quarter 2002. Mr. Flynn added, "Continuing a recent pattern, net loans charged off in first quarter 2003 exceeded the provision for loan losses. This reflects improvement in the credit quality of the portfolio overall." At March 31, 2003, the allowance for credit losses as a percent of total loans and as a percent of nonaccrual loans was 2.21 percent and 151.6 percent, respectively. These ratios compare with 2.30 percent and 180.9 percent, respectively, at December 31, 2002, and 2.51 percent and 139.1 percent, respectively, at March 31, 2002. Balance Sheet and Capital Ratios At March 31, 2003, the Company had total assets of $40.4 billion and total deposits of $33.3 billion. Total shareholders' equity was $3.8 billion and the tangible equity ratio was 9.00 percent. Book value per share was $25.35, up 11.1 percent from a year earlier. The Company's Tier I and total risk based capital ratios at March 31, 2003, were 11.32 percent and 13.07 percent, respectively. Share Repurchase Program During first quarter 2003, the Company repurchased 667,000 shares of common stock at an average price of $39.69 per share. At March 31, 2003, the Company had authority from its Board of Directors to repurchase an additional $33 million of common stock. Common shares outstanding at March 31, 2003, were 150.2 million, a decrease of 6.1 million shares, or 3.9 percent, from one year earlier. Guidance David Matson, Chief Financial Officer, commented, "Our guidance for full year 2003 is unchanged. We continue to expect earnings of $3.65 to $3.85 per diluted common share and a provision for credit losses of $120 million to $160 million." Use of Non-GAAP Financial Measures This press release contains certain references to operating earnings, and other financial measures identified as being stated on "an operating basis" or qualified by the word "operating", that include adjustments from comparable measures calculated and presented in accordance with generally accepted accounting principles (GAAP). Operating earnings, as used herein, differs from net income reported under GAAP in that operating earnings excludes unusual or non-recurring charges, losses, credits or gains. Similarly, other financial measures that are identified herein as being stated on "an operating basis" or qualified by the word "operating" exclude these unusual or non-recurring charges, losses, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Because these items and their impact on the Company's performance are difficult to predict, management believes that financial presentations excluding the impact of these items provide useful supplemental information which is important to a proper understanding of the Company's core business operating results by investors. These presentations should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies. Forward-Looking Statements The following appears in accordance with the Private Securities Litigation Reform Act: This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements can be identified by looking at the fact that they do not relate strictly to historical or current facts. Often, they include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, credit quality of borrowers, operational factors, competition in the geographic and business areas in which the Company conducts its operations, the war in Iraq and global political and general economic conditions. A complete description of the Company, including related risk factors, is discussed in the Company's public filings with the Securities and Exchange Commission, which are available by calling (415) 765-2969 or online at http://www.sec.gov. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement. This communication is not a solicitation of a proxy from any security holder of Monterey Bay Bancorp. Monterey Bay Bancorp, and its directors and executive officers and other members of its management and employees, may be deemed to be participants in the solicitation of proxies from the stockholders of Monterey Bay Bancorp in connection with the merger. Information about the directors and executive officers of Monterey Bay Bancorp and their ownership in Monterey Bay Bancorp stock is set forth in the proxy statement for Monterey Bay Bancorp's 2002 annual meeting of stockholders. Employment and compensation agreements of certain potential participants, including salary continuation agreements and change of control agreements, are filed as exhibits to the Monterey Bay Bancorp Form 10-K filed March 27, 2003. Investors may obtain additional information regarding the interests of the participants by reading the proxy statement/prospectus when it becomes available. Shareholders of Monterey Bay Bancorp and other investors are urged to read the proxy statement/prospectus that will be included in the registration statement on Form S-4, which UnionBanCal and Monterey Bay Bancorp will file with the SEC in connection with the proposed merger because it will contain important information about UnionBanCal, Union Bank of California, Monterey Bay Bancorp, Monterey Bay Bank, the merger, the persons soliciting proxies in the merger and their interests in the merger and related matters. After it is filed with the SEC, the proxy statement/prospectus will be available for free, both on the SEC web site (http://www.sec.gov) and from each of Union Bank of California and Monterey Bay Bank, by contacting: Jack Rice, SVP - Union Bank of California Investor Relations, (415) 765-2998 or C. Edward Holden, President & CEO - Monterey Bay Bank, (831) 768-4840. Conference Call and Webcast The Company will conduct a conference call to review first quarter 2003 results at 8:30 AM PDT (11:30 AM EDT) on April 17, 2003. Interested parties calling from locations within the United States should call 800-553-0288 (651-291-0561 from outside the United States) 10 minutes prior to the beginning of the conference. A live webcast of the call will be available at http://www.uboc.com. Simply follow the links to the Investor Relations section of the website. The webcast replay will be available on the website within 24 hours after the conclusion of the call, through April 24. A recorded playback of the conference call will be available by calling 800-475-6701, (320-365-3844 from outside the United States) from approximately 12:00 PM PDT (3:00 PM EDT), April 17, through 11:59 PM PDT, April 24 (2:59 AM EDT, April 25). The reservation number for this playback is 678808. Based in San Francisco, UnionBanCal Corporation is a bank holding company with assets of $40.4 billion at March 31, 2003. Its primary subsidiary is Union Bank of California, N.A., the third largest commercial bank in California. Union Bank of California, N.A., has 261 banking offices in California, 6 banking offices in Oregon and Washington and 18 international facilities. UnionBanCal Corporation and Subsidiaries Financial Highlights (Unaudited) On a Reported Earnings Basis: As of and for the Three Months Ended - ------------------------------ -------------------------------------- (Dollars in thousands, except March 31, December 31, March 31, per share data) 2002 2002 2003 - ------------------------------ ------------ ------------ ------------ Results of operations: Net interest income (1) $380,973 $404,649 $391,404 Noninterest income 159,749 180,816 185,776 ------------ ------------ ------------ Total revenue 540,722 585,465 577,180 Noninterest expense 311,661 350,869 342,605 Provision for credit losses 55,000 30,000 30,000 ------------ ------------ ------------ Income before income taxes (1) 174,061 204,596 204,575 Taxable-equivalent adjustment 533 983 624 Income tax expense 58,751 58,660 68,434 ------------ ------------ ------------ Net income $114,777 $144,953 $135,517 ============ ============ ============ Per common share: Net income-basic $0.73 $0.96 $0.90 Net income-diluted 0.73 0.95 0.89 Dividends (2) 0.25 0.28 0.28 Book value (end of period) 22.81 24.94 25.35 Common shares outstanding (end of period) 156,336,338 150,702,363 150,217,620 Weighted average common shares outstanding - basic 156,228,149 150,658,795 150,616,367 Weighted average common shares outstanding - diluted 157,810,613 152,162,440 152,012,570 Balance sheet (end of period): Total assets $36,221,931 $40,169,773 $40,387,343 Total loans 25,098,097 26,438,083 26,536,272 Nonaccrual loans 452,428 336,689 386,583 Nonperforming assets 452,761 337,404 386,972 Total deposits 28,758,849 32,840,815 33,252,751 Trust preferred securities 361,903 365,696 363,050 Shareholders' equity 3,566,502 3,758,189 3,808,025 Balance sheet (period average): Total assets $35,083,527 $37,790,101 $38,348,203 Total loans 25,127,757 26,533,425 26,723,057 Earning assets 31,976,493 34,499,595 34,826,771 Total deposits 27,568,947 30,734,581 31,078,388 Shareholders' equity 3,624,767 3,767,001 3,874,293 Financial ratios: Return on average assets (3) 1.33% 1.52% 1.43% Return on average shareholders' equity (3) 12.84% 15.27% 14.19% Efficiency ratio (4) 57.61% 59.93% 59.35% Net interest margin (1) 4.80% 4.67% 4.53% Dividend payout ratio 34.25% 29.17% 31.11% Tangible equity ratio 9.64% 8.93% 9.00% Tier 1 risk-based capital ratio (5) 11.63% 11.18% 11.33% Total risk-based capital ratio (5) 13.50% 12.93% 13.08% Leverage ratio (5) 10.65% 9.75% 9.80% Allowance for credit losses to total loans 2.51% 2.30% 2.21% Allowance for credit losses to nonaccrual loans 139.11% 180.94% 151.64% Net loans charged off to average total loans (3) 0.97% 0.70% 0.80% Nonperforming assets to total loans, foreclosed assets, and distressed loans held for sale 1.80% 1.28% 1.46% Nonperforming assets to total assets 1.25% 0.84% 0.96% On an Operating Earnings Basis: - ------------------------------ Selected financial data on an operating earnings basis (see bottom of exhibit 4 for non-recurring items): Operating earnings per common share - basic $0.73 $0.96 $0.90 Operating earnings per common share - diluted $0.73 $0.95 $0.89 Operating return on average assets (3) 1.33% 1.52% 1.43% Operating return on average shareholders' equity (3) 12.84% 15.29% 14.19% Operating efficiency ratio (4) 57.61% 57.31% 59.35% Operating dividend payout ratio 34.25% 29.17% 31.11% Percent Change to On a Reported Earnings Basis: March 31, 2003 from - ------------------------------ -------------------------------------- (Dollars in thousands, March 31, December 31, except per share data) 2002 2002 Results of operations: Net interest income (1) 2.74% (3.27%) Noninterest income 16.29% 2.74% Total revenue 6.74% (1.42%) Noninterest expense 9.93% (2.36%) Provision for credit losses (45.45%) 0.00% Income before income taxes (1) 17.53% (0.01%) Taxable-equivalent adjustment 17.07% (36.52%) Income tax expense 16.48% 16.66% Net income 18.07% (6.51%) Per common share: Net income-basic 23.29% (6.25%) Net income-diluted 21.92% (6.32%) Dividends (2) 12.00% 0.00% Book value (end of period) 11.14% 1.64% Common shares outstanding (end of period) (3.91%) (0.32%) Weighted average common shares outstanding - basic (3.59%) (0.03%) Weighted average common shares outstanding - diluted (3.67%) (0.10%) Balance sheet (end of period): Total assets 11.50% 0.54% Total loans 5.73% 0.37% Nonaccrual loans (14.55%) 14.82% Nonperforming assets (14.53%) 14.69% Total deposits 15.63% 1.25% Trust preferred securities 0.32% (0.72%) Shareholders' equity 6.77% 1.33% Balance sheet (period average): Total assets 9.31% 1.48% Total loans 6.35% 0.71% Earning assets 8.91% 0.95% Total deposits 12.73% 1.12% Shareholders' equity 6.88% 2.85% (1) Taxable-equivalent basis. (2) Dividends per share reflect dividends declared on UnionBanCal Corporation's common stock outstanding as of the declaration date. (3) Annualized. (4) Noninterest expense excludes foreclosed asset expense (income). (5) Estimated as of March 31, 2003. Exhibit 1 UnionBanCal Corporation and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) (Taxable-Equivalent Basis) On a Reported Earnings Basis ---------------------------------------- For the Three Months Ended ----------------------------- (Amounts in thousands, March 31, Dec. 31, March 31, except per share data) 2002 2002 2003 - ---------------------------------------- --------- --------- --------- Interest Income Loans $375,984 $383,131 $363,239 Securities 81,654 79,180 80,193 Interest bearing deposits in banks 496 908 962 Federal funds sold and securities purchased under resale agreements 4,059 3,541 1,677 Trading account assets 720 1,499 957 --------- --------- --------- Total interest income 462,913 468,259 447,028 --------- --------- --------- Interest Expense Domestic deposits 59,935 47,743 41,571 Foreign deposits 6,264 4,014 3,206 Federal funds purchased and securities sold under repurchase agreements 1,949 896 1,327 Commercial paper 3,974 3,647 2,728 Medium and long-term debt 2,412 2,146 1,866 UnionBanCal Corporation - obligated mandatorily redeemable preferred securities of subsidiary grantor trust 3,963 3,793 3,671 Other borrowed funds 3,443 1,371 1,255 --------- --------- --------- Total interest expense 81,940 63,610 55,624 --------- --------- --------- Net Interest Income 380,973 404,649 391,404 Provision for credit losses 55,000 30,000 30,000 --------- --------- --------- Net interest income after provision for credit losses 325,973 374,649 361,404 --------- --------- --------- Noninterest Income Service charges on deposit accounts 66,143 71,179 72,287 Trust and investment management fees 36,725 34,273 32,675 International commissions and fees 18,223 19,363 19,613 Insurance commissions 7,153 7,683 13,005 Card processing fees, net 8,545 8,981 9,687 Brokerage commissions and fees 9,632 8,211 8,866 Foreign exchange trading gains, net 6,447 6,895 6,934 Merchant banking fees 6,945 9,469 6,018 Securities losses, net (2,566) (483) (522) Other 2,502 15,245 17,213 --------- --------- --------- Total noninterest income 159,749 180,816 185,776 --------- --------- --------- Noninterest Expense Salaries and employee benefits 178,876 183,915 198,107 Net occupancy 23,381 30,842 27,636 Equipment 16,340 17,510 16,671 Communications 13,941 13,687 13,844 Professional services 9,503 14,062 12,014 Data processing 8,991 8,114 8,484 Foreclosed asset expense 125 16 51 Other 60,504 82,723 65,798 --------- --------- --------- Total noninterest expense 311,661 350,869 342,605 --------- --------- --------- Income before income taxes 174,061 204,596 204,575 Taxable-equivalent adjustment 533 983 624 Income tax expense 58,751 58,660 68,434 --------- --------- --------- Net Income $114,777 $144,953 $135,517 ========= ========= ========= Net income per common share - basic $0.73 $0.96 $0.90 ========= ========= ========= Net income per common share - diluted $0.73 $0.95 $0.89 ========= ========= ========= Weighted average common shares outstanding - basic 156,228 150,659 150,616 ========= ========= ========= Weighted average common shares outstanding - diluted 157,811 152,162 152,013 ========= ========= ========= Exhibit 2 UnionBanCal Corporation and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) (Taxable-Equivalent Basis) On an Operating Earnings Basis (1) For the Three Months Ended --------------------------------- (Amounts in thousands, except per March 31, December 31, March 31, share data) 2002 2002 2003 ---------- ------------ --------- Interest Income Loans $375,984 $383,131 $363,239 Securities 81,654 79,180 80,193 Interest bearing deposits in banks 496 908 962 Federal funds sold and securities purchased under resale agreements 4,059 3,541 1,677 Trading account assets 720 1,499 957 ---------- ------------ --------- Total interest income 462,913 468,259 447,028 ---------- ------------ --------- Interest Expense Domestic deposits 59,935 47,743 41,571 Foreign deposits 6,264 4,014 3,206 Federal funds purchased and securities sold under repurchase agreements 1,949 896 1,327 Commercial paper 3,974 3,647 2,728 Medium and long-term debt 2,412 2,146 1,866 UnionBanCal Corporation - obligated mandatorily redeemable preferred securities of subsidiary grantor trust 3,963 3,793 3,671 Other borrowed funds 3,443 1,371 1,255 ---------- ------------ --------- Total interest expense 81,940 63,610 55,624 ---------- ------------ --------- Net Interest Income 380,973 404,649 391,404 Provision for credit losses 55,000 30,000 30,000 ---------- ------------ --------- Net interest income after provision for credit losses 325,973 374,649 361,404 ---------- ------------ --------- Noninterest Income Service charges on deposit accounts 66,143 71,179 72,287 Trust and investment management fees 36,725 34,273 32,675 International commissions and fees 18,223 19,363 19,613 Insurance commissions 7,153 7,683 13,005 Card processing fees, net 8,545 8,981 9,687 Brokerage commissions and fees 9,632 8,211 8,866 Foreign exchange trading gains, net 6,447 6,895 6,934 Merchant banking fees 6,945 9,469 6,018 Securities losses, net (2,566) (483) (522) Other 2,502 15,245 17,213 ---------- ------------ --------- Total noninterest income 159,749 180,816 185,776 ---------- ------------ --------- Noninterest Expense Salaries and employee benefits 178,876 183,915 198,107 Net occupancy 23,381 30,842 27,636 Equipment 16,340 17,510 16,671 Communications 13,941 13,687 13,844 Professional services 9,503 14,062 12,014 Data processing 8,991 8,114 8,484 Foreclosed asset expense 125 16 51 Other 60,504 67,417 65,798 ---------- ------------ --------- Total noninterest expense 311,661 335,563 342,605 ---------- ------------ --------- Income before income taxes 174,061 219,902 204,575 Taxable-equivalent adjustment 533 983 624 Income tax expense 58,751 73,785 68,434 ---------- ------------ --------- Net operating earnings $114,777 $145,134 $135,517 ========== ============ ========= Net operating earnings per common share - basic $ 0.73 $ 0.96 $ 0.90 ========== ============ ========= Net operating earnings per common share - diluted $ 0.73 $ 0.95 $ 0.89 ========== ============ ========= Weighted average common shares outstanding - basic 156,228 150,659 150,616 ========== ============ ========= Weighted average common shares outstanding - diluted 157,811 152,162 152,013 ========== ============ ========= (1) See exhibit 4 for reconciliation of 'reported earnings' to 'operating earnings'. Exhibit 3 UnionBanCal Corporation and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) Reconciliations (Taxable-Equivalent Basis) Reported Earnings Reconciliation to Operating Earnings For the Three Months Ended ------------------------------------ March 31, 2002 ------------------------------------ Non- (Amounts in thousands, except per recurring share data) Reported Items Operating - --------------------------------- ------------ ---------- ---------- Net Interest Income $ 380,973 $ - $ 380,973 Provision for credit losses 55,000 - 55,000 ------------ ---------- ---------- Net interest income after provision for credit losses 325,973 - 325,973 ------------ ---------- ---------- Noninterest Income Other 2,502 - 2,502 All other (no adjustments) 157,247 - 157,247 ------------ ---------- ---------- Total noninterest income 159,749 - 159,749 ------------ ---------- ---------- Noninterest Expense Other (1) 60,504 - 60,504 All other (no adjustments) 251,157 - 251,157 ------------ ---------- ---------- Total noninterest expense 311,661 - 311,661 ------------ ---------- ---------- Income/Operating earnings before income taxes 174,061 - 174,061 Taxable-equivalent adjustment 533 - 533 Income tax expense (2) (3) 58,751 - 58,751 ------------ ---------- ---------- Net Income/Operating Earnings $ 114,777 $ - $ 114,777 ============ ========== ========== Net income/Operating earnings per common share - basic $ 0.73 $ - $ 0.73 ============ ========== ========== Net income/Operating earnings per common share - diluted $ 0.73 $ - $ 0.73 ============ ========== ========== Weighted average common shares outstanding - basic 156,228 156,228 ============ ========== Weighted average common shares outstanding - diluted 157,811 157,811 =========== ========= Reported Net Income $ 114,777 ----------------------------------- Non-recurring Items (1) LIHC amortization adjustments (4th quarter 2002) - (2) Tax impact of items listed above (1) - (3) Reduction in income tax due to LIHC tax credit (4th quarter 2002) - ------------------------------------ Net Operating Earnings $ 114,777 ==================================== For the Three Months Ended ------------------------------------ December 31, 2002 ------------------------------------ Non- (Amounts in thousands, except per recurring share data) Reported Items Operating - --------------------------------- ----------------------- ------------ Net Interest Income $ 404,649 $ - $ 404,649 Provision for credit losses 30,000 - 30,000 ------------ ---------- ---------- Net interest income after provision for credit losses 374,649 - 374,649 ------------ ---------- ---------- Noninterest Income Other 15,245 - 15,245 All other (no adjustments) 165,571 - 165,571 ------------ ---------- ---------- Total noninterest income 180,816 - 180,816 ------------ ---------- ---------- Noninterest Expense Other (1) 82,723 (15,306) 67,417 All other (no adjustments) 268,146 - 268,146 ------------ ---------- ---------- Total noninterest expense 350,869 (15,306) 335,563 ------------ ---------- ---------- Income/Operating earnings before income taxes 204,596 15,306 219,902 Taxable-equivalent adjustment 983 - 983 Income tax expense (2) (3) 58,660 15,125 73,785 ------------ ---------- ---------- Net Income/Operating Earnings $ 144,953 $ 181 $ 145,134 ============ ========== =========== Net income/Operating earnings per common share - basic $ 0.96 $ - $ 0.96 ============ ========== =========== Net income/Operating earnings per common share - diluted $ 0.95 $ - $ 0.95 ============ ========== =========== Weighted average common shares outstanding - basic 150,659 150,659 ============ =========== Weighted average common shares outstanding - diluted 152,162 152,162 ============ =========== Reported Net Income $ 144,953 ----------------------------------- Non-recurring Items (1) LIHC amortization adjustments (4th quarter 2002) 15,306 (2) Tax impact of items listed above (1) (5,518) (3) Reduction in income tax due to LIHC tax credit (4th quarter 2002) (9,607) ----------------------------------- Net Operating Earnings $ 145,134 =================================== For the Three Months Ended ------------------------------------ March 31, 2003 ------------------------------------ Non- (Amounts in thousands, except per recurring share data) Reported Items Operating - --------------------------------- ------------ ---------- ---------- Net Interest Income $ 391,404 $ - $ 391,404 Provision for credit losses 30,000 - 30,000 ------------ ---------- ---------- Net interest income after provision for credit losses 361,404 - 361,404 ------------ ---------- ---------- Noninterest Income Other 17,213 - 17,213 All other (no adjustments) 168,563 - 168,563 ------------ ---------- ---------- Total noninterest income 185,776 - 185,776 ------------ ---------- ---------- Noninterest Expense Other (1) 65,798 - 65,798 All other (no adjustments) 276,807 - 276,807 ------------ ---------- ---------- Total noninterest expense 342,605 - 342,605 ------------ ---------- ---------- Income/Operating earnings before income taxes 204,575 - 204,575 Taxable-equivalent adjustment 624 - 624 Income tax expense (2) (3) 68,434 - 68,434 ------------ ---------- ---------- Net Income/Operating Earnings $ 135,517 $ - $ 135,517 ============ ========== ========== Net income/Operating earnings per common share - basic $ 0.90 $ - $ 0.90 ============ ========== ========== Net income/Operating earnings per common share - diluted $ 0.89 $ - $ 0.89 ============ ========== ========== Weighted average common shares outstanding - basic 150,616 150,616 ============ ========== Weighted average common shares outstanding - diluted 152,013 152,013 ============ ========== Reported Net Income $ 135,517 ------------------------------------ Non-recurring Items (1) LIHC amortization adjustments (4th quarter 2002) - (2) Tax impact of items listed above (1) - (3) Reduction in income tax due to LIHC tax credit (4th quarter 2002) - ------------------------------------ Net Operating Earnings $ 135,517 ==================================== Exhibit 4 UnionBanCal Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) (Unaudited) March 31, December 31, March 31, (Dollars in thousands) 2002 2002 2003 - ------------------------------- ------------ ------------ ------------ Assets Cash and due from banks $ 1,787,942 $ 2,823,573 $ 2,480,626 Interest bearing deposits in banks 110,147 278,849 226,893 Federal funds sold and securities purchased under resale agreements 2,109,600 1,339,700 1,736,800 ------------ ------------ ------------ Total cash and cash equivalents 4,007,689 4,442,122 4,444,319 Trading account assets 221,179 276,021 305,102 Securities available for sale: Securities pledged as collateral 120,560 157,823 117,092 Held in portfolio 5,289,210 7,180,677 7,014,363 Loans (net of allowance for credit losses: March 31, 2002, $629,367; December 31, 2002, $609,190; March 31, 2003, $586,197) 24,468,730 25,828,893 25,950,075 Due from customers on acceptances 136,303 62,469 128,401 Premises and equipment, net 489,915 504,666 504,451 Intangible assets 15,292 38,518 37,541 Goodwill 68,623 150,542 150,846 Other assets 1,404,430 1,528,042 1,735,153 ------------ ------------ ------------ Total assets $36,221,931 $40,169,773 $40,387,343 ============ ============ ============ Liabilities Domestic deposits: Noninterest bearing $11,878,768 $15,537,906 $15,727,203 Interest bearing 14,540,336 15,258,479 15,944,421 Foreign deposits: Noninterest bearing 404,378 583,836 434,258 Interest bearing 1,935,367 1,460,594 1,146,869 ------------ ------------ ------------ Total deposits 28,758,849 32,840,815 33,252,751 Federal funds purchased and securities sold under repurchase agreements 369,565 334,379 282,135 Commercial paper 900,851 1,038,982 852,494 Other borrowed funds 900,360 267,047 139,821 Acceptances outstanding 136,303 62,469 128,401 Other liabilities 827,925 1,083,836 1,142,278 Medium and long-term debt 399,673 418,360 418,388 UnionBanCal Corporation- obligated mandatorily redeemable preferred securities of subsidiary grantor trust 361,903 365,696 363,050 ------------ ------------ ------------ Total liabilities 32,655,429 36,411,584 36,579,318 ------------ ------------ ------------ Commitments and contingencies Shareholders' Equity Preferred stock: Authorized 5,000,000 shares, no shares issued or outstanding as of March 31, 2002, December 31, 2002, and March 31, 2003 - - - Common stock - no stated value: Authorized 300,000,000 shares, issued 156,336,338 shares as of March 31, 2002, 150,702,363 shares as of December 31, 2002, and 150,217,620 shares as of March 31, 2003 1,172,479 926,460 905,668 Retained earnings 2,307,150 2,591,635 2,685,019 Accumulated other comprehensive income 86,873 240,094 217,338 ------------ ------------ ------------ Total shareholders' equity 3,566,502 3,758,189 3,808,025 ------------ ------------ ------------ Total liabilities and shareholders' equity $36,221,931 $40,169,773 $40,387,343 ============ ============ ============ Exhibit 5 UnionBanCal Corporation and Subsidiaries Loans (Unaudited) Three Months Ended ---------------------------------- March 31, December 31, March 31, (Dollars in millions) 2002 2002 2003 - --------------------------------- ------------ ----------- --------- Loans (period average) Commercial, financial and industrial $ 11,308 $ 10,849 $ 10,406 Construction 1,076 1,290 1,256 Mortgage - Commercial 3,635 4,046 4,157 Mortgage - Residential 5,084 6,135 6,569 Consumer 2,028 1,989 2,015 Lease financing 957 818 784 Loans originated in foreign branches 1,040 1,406 1,536 ------------ ----------- --------- Total loans $ 25,128 $ 26,533 $ 26,723 ============ =========== ========= Nonperforming assets (period end) Nonaccrual loans: Commercial, financial and industrial $ 423 $ 276 $ 273 Construction - - - Mortgage - Commercial 27 24 26 Lease 3 36 85 Foreign - - 3 ------------ ----------- --------- Total nonaccrual loans 453 336 387 Foreclosed assets - 1 - ------------ ----------- --------- Total nonperforming assets $ 453 $ 337 $ 387 ============ =========== ========= Loans 90 days or more past due and still accruing $ 14 $ 8 $ 19 ============ =========== ========= Analysis of Allowance for Credit Losses Beginning balance $ 635 $ 623 $ 609 Provision for credit losses 55 30 30 Foreign translation adjustment and other net additions (deductions) (1) - 3 - Loans charged off: Commercial, financial and industrial (62) (34) (38) Real estate - - - Consumer (3) (4) (3) Lease financing (1) (18) (19) ------------ ----------- --------- Total loans charged off (66) (56) (60) ------------ ----------- --------- Loans recovered: Commercial, financial and industrial 4 8 6 Consumer 1 1 1 ------------ ----------- --------- Total loans recovered 5 9 7 ------------ ----------- --------- Net loans charged-off (61) (47) (53) ------------ ----------- --------- Ending balance $ 629 $ 609 $ 586 ============ =========== ========= Percent Change to March 31, 2003 from ----------------------------------- March 31, December 31, (Dollars in millions) 2002 2002 - --------------------------------- ---------------- ---------------- Loans (period average) Commercial, financial and industrial (7.98%) (4.08%) Construction 16.73% (2.64%) Mortgage - Commercial 14.36% 2.74% Mortgage - Residential 29.21% 7.07% Consumer (0.64%) 1.31% Lease financing (18.08%) (4.16%) Loans originated in foreign branches 47.69% 9.25% Total loans 6.35% 0.72% Nonperforming assets (period end) Nonaccrual loans: Commercial, financial and industrial (35.46%) (1.09%) Construction 0.00% 0.00% Mortgage - Commercial (3.70%) 8.33% Lease nm 136.11% Foreign nm nm Total nonaccrual loans (14.57%) 15.18% Foreclosed assets 0.00% (100.00%) Total nonperforming assets (14.57%) 14.84% Loans 90 days or more past due and still accruing 35.71% 137.50% - --------------------------------- (1) Includes a transfer of $2.8 million related to the Valencia Bank acquisition in the fourth quarter of 2002. nm = not meaningful Exhibit 6 UnionBanCal Corporation and Subsidiaries Net Interest Income (Unaudited) For the Three Months Ended ------------------------------------------- March 31, 2002 ------------------------------------------- Interest Average Income/ Yield/ (Dollars in thousands) Average Balance Expense(1) Rate(1) - ------------------------- ---------------- -------------- ----------- Assets Loans:(2) Domestic $ 24,088,142 $ 368,062 6.17 % Foreign(3) 1,039,615 7,922 3.09 Securities - taxable 5,552,344 80,663 5.81 Securities - tax-exempt 38,233 991 10.37 Interest bearing deposits in banks 84,408 496 2.38 Federal funds sold and securities purchased under resale agreements 936,382 4,059 1.76 Trading account assets 237,369 720 1.23 ---------------- -------------- Total earning assets 31,976,493 462,913 5.84 -------------- Allowance for credit losses (644,379) Cash and due from banks 1,942,621 Premises and equipment, net 496,269 Other assets 1,312,523 ---------------- Total assets $ 35,083,527 ================ Liabilities Domestic deposits: Interest bearing $ 7,459,506 23,157 1.26 Savings and consumer time 3,549,262 16,970 1.94 Large time 3,485,482 19,808 2.30 Foreign deposits(3) 1,749,251 6,264 1.45 ---------------- -------------- Total interest bearing deposits 16,243,501 66,199 1.65 ---------------- -------------- Federal funds purchased and securities sold under repurchase agreements 541,182 1,949 1.46 Commercial paper 919,259 3,974 1.75 Other borrowed funds 698,053 3,443 2.00 Medium and long-term debt 399,989 2,412 2.45 UnionBanCal Corporation - obligated mandatorily redeemable preferred securities of subsidiary grantor trust 352,300 3,963 4.46 ---------------- -------------- Total borrowed funds 2,910,783 15,741 2.19 ---------------- -------------- Total interest bearing liabilities 19,154,284 81,940 1.73 -------------- Noninterest bearing deposits 11,325,446 Other liabilities 979,030 ---------------- Total liabilities 31,458,760 Shareholders' Equity Common equity 3,624,767 ---------------- Total shareholders' equity 3,624,767 ---------------- Total liabilities and shareholders' equity $ 35,083,527 ================ Net interest income/margin (taxable-equivalent basis) 380,973 4.80 % Less: taxable-equivalent adjustment 533 -------------- Net interest income $ 380,440 ============== For the Three Months Ended ------------------------------------------- December 31, 2002 ------------------------------------------- Interest Average Average Income/ Yield/ (Dollars in thousands) Balance Expense(1) Rate(1) - ------------------------- ---------------- -------------- ----------- Assets Loans:(2) Domestic $ 25,127,848 $ 374,488 5.93 % Foreign(3) 1,405,577 8,643 2.44 Securities - taxable 6,392,614 78,192 4.89 Securities - tax-exempt 40,396 988 9.78 Interest bearing deposits in banks 154,420 908 2.33 Federal funds sold and securities purchased under resale agreements 1,011,579 3,541 1.39 Trading account assets 367,161 1,499 1.62 ---------------- -------------- Total earning assets 34,499,595 468,259 5.40 -------------- Allowance for credit losses (634,297) Cash and due from banks 2,077,800 Premises and equipment, net 501,279 Other assets 1,345,724 ---------------- Total assets $ 37,790,101 ================ Liabilities Domestic deposits: Interest bearing $ 8,986,432 21,388 0.94 Savings and consumer time 3,766,055 13,928 1.47 Large time 2,463,080 12,427 2.00 Foreign deposits(3) 1,416,131 4,014 1.12 ---------------- -------------- Total interest bearing deposits 16,631,698 51,757 1.23 ---------------- -------------- Federal funds purchased and securities sold under repurchase agreements 322,394 896 1.10 Commercial paper 993,129 3,647 1.46 Other borrowed funds 250,533 1,371 2.17 Medium and long-term debt 399,713 2,146 2.13 UnionBanCal Corporation - obligated mandatorily redeemable preferred securities of subsidiary grantor trust 351,878 3,793 4.34 ---------------- -------------- Total borrowed funds 2,317,647 11,853 2.03 ---------------- -------------- Total interest bearing liabilities 18,949,345 63,610 1.33 -------------- Noninterest bearing deposits 14,102,883 Other liabilities 970,872 ---------------- Total liabilities 34,023,100 Shareholders' Equity Common equity 3,767,001 ---------------- Total shareholders' equity 3,767,001 ---------------- Total liabilities and shareholders' equity $ 37,790,101 ================ Net interest income/margin (taxable-equivalent basis) 404,649 4.67 % Less: taxable-equivalent adjustment 983 -------------- Net interest income $ 403,666 ============== For the Three Months Ended ------------------------------------------- March 31, 2003 ------------------------------------------- Interest Income/ Average (Dollars in thousands) Average Balance Expense(1) Yield/Rate(1) - ------------------------- ---------------- ----------- ------------- Assets Loans:(2) Domestic $25,186,678 $355,073 5.70 % Foreign(3) 1,536,379 8,166 2.16 Securities - taxable 7,014,825 79,179 4.52 Securities - tax-exempt 41,943 1,014 9.67 Interest bearing deposits in banks 203,432 962 1.92 Federal funds sold and securities purchased under resale agreements 536,114 1,677 1.27 Trading account assets 307,400 957 1.26 ---------------- ----------- Total earning assets 34,826,771 447,028 5.18 ----------- Allowance for credit losses (603,240) Cash and due from banks 2,094,976 Premises and equipment, net 506,964 Other assets 1,522,732 ---------------- Total assets $38,348,203 ================= Liabilities Domestic deposits: Interest bearing $9,365,182 18,809 0.81 Savings and consumer time 3,819,545 12,316 1.31 Large time 2,414,309 10,446 1.75 Foreign deposits(3) 1,384,177 3,206 0.94 ----------------- --------- Total interest bearing deposits 16,983,213 44,777 1.07 ----------------- --------- Federal funds purchased and securities sold under repurchase agreements 517,511 1,327 1.04 Commercial paper 923,327 2,728 1.20 Other borrowed funds 172,870 1,255 2.94 Medium and long-term debt 399,729 1,866 1.89 UnionBanCal Corporation - obligated mandatorily redeemable preferred securities of subsidiary grantor trust 351,654 3,671 4.13 ----------------- --------- Total borrowed funds 2,365,091 10,847 1.85 ----------------- --------- Total interest bearing liabilities 19,348,304 55,624 1.16 --------- Noninterest bearing deposits 14,095,175 Other liabilities 1,030,431 ----------------- Total liabilities 34,473,910 Shareholders' Equity Common equity 3,874,293 ----------------- Total shareholders' equity 3,874,293 ----------------- Total liabilities and shareholders' equity $38,348,203 ================= Net interest income/margin (taxable-equivalent basis) 391,404 4.53 % Less: taxable-equivalent adjustment 624 --------- Net interest income $390,780 ========= - ------------------------- (1) Yields and interest income are presented on a taxable-equivalent basis using the federal statutory tax rate of 35 percent. (2) Average balances on loans outstanding include all nonperforming loans. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield. (3) Foreign loans and deposits are those loans and deposits originated in foreign branches. Exhibit 7 UnionBanCal Corporation and Subsidiaries On a Reported Earnings Basis (reference to exhibit 2) Noninterest Income (Unaudited) Percentage Change to For the Three Months Ended March 31, 2003 from ----------------------------- --------------------- March December March March December (Dollars in 31, 31, 31, 31, 31, thousands) 2002 2002 2003 2002 2002 - ------------------ --------- --------- --------- ---------- --------- Service charges on deposit accounts $ 66,143 $ 71,179 $ 72,287 9.29 % 1.56 % Trust and investment management fees 36,725 34,273 32,675 (11.03) (4.66) International commissions and fees 18,223 19,363 19,613 7.63 1.29 Insurance commissions 7,153 7,683 13,005 81.81 69.27 Card processing fees, net 8,545 8,981 9,687 13.36 7.86 Brokerage commissions and fees 9,632 8,211 8,866 (7.95) 7.98 Foreign exchange trading gains, net 6,447 6,895 6,934 7.55 0.57 Merchant banking fees 6,945 9,469 6,018 (13.35) (36.45) Securities losses, net (2,566) (483) (522) (79.66) 8.07 Other 2,502 15,245 17,213 587.97 12.91 --------- --------- --------- Total noninterest income $159,749 $180,816 $185,776 16.29 % 2.74 % ========= ========= ========= Noninterest Expense (Unaudited) Percentage Change to For the Three Months Ended March 31, 2003 from ----------------------------- --------------------- March December March March December (Dollars in 31, 31, 31, 31, 31, thousands) 2002 2002 2003 2002 2002 - ------------------ --------- --------- --------- -------- --------- Salaries and other compensation $142,423 $150,928 $153,060 7.47 % 1.41 % Employee benefits 36,453 32,987 45,047 23.58 36.56 --------- --------- --------- Salaries and employee benefits 178,876 183,915 198,107 10.75 7.72 Net occupancy 23,381 30,842 27,636 18.20 (10.39) Equipment 16,340 17,510 16,671 2.03 (4.79) Communications 13,941 13,687 13,844 (0.70) 1.15 Software 11,510 11,240 12,076 4.92 7.44 Professional services 9,503 14,062 12,014 26.42 (14.56) Advertising and public relations 10,008 9,736 9,667 (3.41) (0.71) Data processing 8,991 8,114 8,484 (5.64) 4.56 Intangible asset amortization 884 1,824 2,477 180.20 35.80 Foreclosed asset expense 125 16 51 (59.20) 218.75 Other 38,102 59,923 41,578 9.12 (30.61) --------- --------- --------- Total noninterest expense $311,661 $350,869 $342,605 9.93 % (2.36)% ========= ========= ========= Exhibit 8 UnionBanCal Corporation and Subsidiaries On an Operating Earnings Basis (reference to exhibit 3) (1) Noninterest Income (Unaudited) Percentage Change to For the Three Months Ended March 31, 2003 from ----------------------------- --------------------- March December March March December (Dollars in 31, 31, 31, 31, 31, thousands) 2002 2002 2003 2002 2002 - ------------------ ----------- -------- -------- ------- -------- Service charges on deposit accounts $ 66,143 $ 71,179 $ 72,287 9.29 % 1.56 % Trust and investment management fees 36,725 34,273 32,675 (11.03) (4.66) International commissions and fees 18,223 19,363 19,613 7.63 1.29 Insurance commissions 7,153 7,683 13,005 81.81 69.27 Card processing fees, net 8,545 8,981 9,687 13.36 7.86 Brokerage commissions and fees 9,632 8,211 8,866 (7.95) 7.98 Foreign exchange trading gains, net 6,447 6,895 6,934 7.55 0.57 Merchant banking fees 6,945 9,469 6,018 (13.35) (36.45) Securities losses, net (2,566) (483) (522) (79.66) 8.07 Other 2,502 15,245 17,213 587.97 12.91 ----------- -------- -------- Total noninterest income $159,749 $180,816 $185,776 16.29 % 2.74 % =========== ======== ======== Noninterest Expense (Unaudited) Percentage Change to For the Three Months Ended March 31, 2003 from ----------------------------- --------------------- March December March March December (Dollars in 31, 31, 31, 31, 31, thousands) 2002 2002 2003 2002 2002 - ------------------ ----------- -------- -------- ------- -------- Salaries and other compensation $142,423 $150,928 $153,060 7.47 % 1.41 % Employee benefits 36,453 32,987 45,047 23.58 36.56 ----------- -------- -------- Salaries and employee benefits 178,876 183,915 198,107 10.75 7.72 Net occupancy 23,381 30,842 27,636 18.20 (10.39) Equipment 16,340 17,510 16,671 2.03 (4.79) Communications 13,941 13,687 13,844 (0.70) 1.15 Software 11,510 11,240 12,076 4.92 7.44 Professional services 9,503 14,062 12,014 26.42 (14.56) Advertising and public relations 10,008 9,736 9,667 (3.41) (0.71) Data processing 8,991 8,114 8,484 (5.64) 4.56 Intangible asset amortization 884 1,824 2,477 180.20 35.80 Foreclosed asset expense 125 16 51 (59.20) 218.75 Other 38,102 44,617 41,578 9.12 (6.81) ----------- -------- -------- Total noninterest expense $311,661 $335,563 $342,605 9.93 % 2.10 % =========== ======== ======== (1) See exhibit 4 for reconciliation of 'reported earnings' to 'operating earnings'. Exhibit 9 CONTACT: UnionBanCal Corporation John A. Rice, Jr., 415/765-2998 (Investor Relations) Michelle R. Crandall, 415/765-2780 (Investor Relations) Stephen L. Johnson, 415/765-3252 (Public Relations) -----END PRIVACY-ENHANCED MESSAGE-----